Central clearing may redistribute systemic risk, says ECB member

A member of the European Central Bank (ECB) has voiced concerns
over the consequences of mandatory central clearing of OTC
derivatives redistributing and potentially increasing systemic
risk, writes Jonathan Watkins.

Benoît
Cœuré, member of the ECB’s executive
board, refers to the issues as the 'known unknowns of central
clearing’, and points out that while reforms
undoubtedly bring benefits, some of them are ambiguous and
should be addressed carefully.

"Central
clearing also involves risk redistribution and potentially the
creation of new risks," said Cœuré, speaking in
Chicago this week.